Man Oh Manischewitz, I step into a one hour meld with President Fish and Millhouse the Accountant and voila, the critters have taken over the asylum. Yeah, I know--it's only a ten handle rally in the S&P cash but given what was--and what coulda been--Hoofy is thanking the skin of his teeth. Some top line vibes...

I step into a one hour meld with and and , the critters have taken over the asylum. Yeah, I know--it's only a ten handle rally in the S&P cash but given what was--and what coulda been--Hoofy is thanking the skin of his teeth. Some top line vibes...

Minyan Black Crowes asked me my gut on Apple into the launch. I told him that anytime I see three day lines and worldwide, non-stop coverage, my "sell the news" antennae start to vibrate. I also told him that thought might be cutesy and we may need to see tepid numbers (vs. the whisper) before Boo chews on the downside meat.

Keeping with that reversal of fortune theme (and with a conscious nod that the sharpest rallies occur in the context of a "bear market"), the piggies find their first poke at BKX 114...then 115.40... then 116... then 118. In other words, we stair-stepped lower and we'll need to climb those flights on the way up.

Remember that S&P put try that got stopped out for a two handle loss? It coulda been bloody if I didn't stick to my discipline. And so ya know, given what I was seein' at the time, I would make that bet ten times out of ten times.

My best guess on the sub-prime, CDO evolution? Continual shoes with periods of intermittent calm.

Nice feel, Professor Bennet.

Orange whip? Orange Whip? Orange Whip? Three Orange whips as we tack 'em on and take em home. I, for one, am looking forward to an ol' fashioned kick-back tonight. Balance, as they say, is good for the soul.

Fare ye well into the bell.

R.P.

Goings on out East...- Sally Limantour- 2:21 PM

With the unwinding of the carry trade comes a reduced appetite for risk exposure . Last week the JY/Euro cross was trading as high as 167 and has moved down and is now over 3.5% from its all time highs. Positions are being liquidated as borrowers run to take in yen. This is a "game" that has been going on a long time and massive positions have been built up. The question becomes is this one of the many small corrections in a major trend or the beginning of a reversal?

Comments yesterday from Koji Omi, Japan's finance minister, is supporting the yen. He said investors should be aware of the risk of "one-way currency trading," echoing warnings on the excessive build-up of carry trades that have followed recent Group of Seven meetings.

Whether this is a policy shift or just rhetoric remains to be seen, but any real perception that the BOJ is game for some serious intervention is something that will intensify the unwinding.

The S&P is a yawn and the market cannot trade into yesterday's value area. We popped through the 1508.00 (ES) value area low but quickly rejected it and just keep trading around today's pivot mentioned this morning.

China is building more oil tankers that are huge. The technical name for them is VLCC, Very Large Crude Carrier. They are 300 meters long and tall as a 10 story building. There is some discussion as to how or if this will alter the Baltic Dry Index. Accelerated ship building by China could double global shipping capacity and depress freight rates.

I wonder how this plays into a global liquidity glut, possible steel market gluts, a slowdown in China after the Olympics and consumers deciding to pay down debt?

New point and figure sell signals today are leading by a wide margin, 40 to 4.

Overall sell signals are leading 64 to 15.

This is a warning sign, especially with the market up somewhat today.

Already the bullish percents for the Russell 2000 and Nasdaq are negative.

The S&P 500Bullish Percent is now within 1% of a reversal down to negative from what is already a very high risk level.

The broader NYSE Bullish Percent is also now within about 1% of a reversal down to negative from a very high risk level.

Just be aware that we have now see five consecutive days of deterioration in these indicators.

Given the areas of the market - financials, Real Estate-related sectors - from where the smoke is gathering, a reversal down in these indicators from such a high risk level would be a tremendous siren call warning of potential widespread damage - the kind of damage we have not see in more than five years.

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